Discuss the following situations, focusing on whether or not the parties involved have the capacity to

contract and, if so, to what extent is any resulting contract binding:

1. Lukas is 13 years old. He enters into a contract with Leah (an adult) to purchase of a guitar. Leah

then decides that she does not wish to sell the guitar and alleges that no valid contract exists as

Lukas is too young to be able to enter into a legally binding contract. Is Leah correct? Would your

answer differ if Lukas changed his mind and did not wish to purchase the guitar, but Leah wished

to enforce the agreement?

2. Ross is mentally disabled. He enters his local BMW showroom and enters into an agreement to

purchase a new M3 coup for 50,000. Ross later regrets entering into the agreement and argues

that, due to his mental disability, the agreement is not binding. Is he correct?

3. Louise decides to leave school at the age of 16, once she hears that a friend is looking for an

apprentice for his carpentry firm. Louise enters into a contract that states that she shall be an

apprentice of the firm. A week before she is due to start work, she changes her mind and decides

to complete her A Levels. Does the carpenter have a cause of action against Louise?

4. Georgie enters into a contract to rent a small flat when she is 17 years and 10 months old. The

contract provides that her tenancy shall last a minimum of 12 months, after which time she can

cancel the agreement by giving one months notice. Eight months later, she cancels the agreement,

arguing that as she made the contract when she was a minor, it is not binding on her. Can Georgie

cancel the contract?

5. Ceri is walking home one Saturday night after spending an evening in the pub with her friends. She

has drunk two bottles of wine and is clearly drunk. She walks into a local 24-hour supermarket and

buys three mobile phones, four jackets and three bottles of Mot & Chandon champagne at a total

cost of 600. The next day she takes the purchases back to the supermarket and argues that, as

she was drunk, no contract exists and she should be entitled to her money back. Is she entitled to

recover the 600?

6.Explain four ways in which an agency relationship would be terminated by action of the parties.

7. A married woman who is living with her husband is deemed to be his agent for the purpose obtaining necessities for the family this is known as domestic agency of necessity. Outline the exception to this rule.

8. Explain the essentials of a valid ratification of an agency contract.

9 .Hosea and Jeremiah met for a business lunch at a restaurant in town. They were later joined by Joshua, jeremiah's friend. During the discussion, Jeremiah informed joshua that he was hosea's agent to which hosea did not object.

A week later, Jeremiah obtained goods on credit from Joshua on behalf of hosea. Jeremiah has since disappeared and Joshua is claiming payment for the goods from hosea.

Explain the legal applicable in the case and advise Joshua.

10.Summarise four conditions that must be met before a partner in a firm could bind other partners in transactions with the third parties.

Explain three obligations of a partner to his fellow partners.